Should a Tour Company Spice Up Their Offer with Free Tours?

Tour company owner and tour guide share the same business goal – they want to make money. Including free tours in one’s tour offer could help achieve that goal. Before you call me insane and close this tab, give me a chance to explain. 🙂

Free touring is not for everyone. Offering free tours has its benefits and drawbacks. But there are situations when this hybrid ideal – combining nonprofit and profit tours works great! In this article, we’ll go through free tour’s pros and cons and in the end, you’ll know if this is something for you.

How Do Tour Companies Profit If They Give Away Their Tours for Free?

There are multiple benefits of offering a few free tours for everyone included in the process—tour company owner, tour guide, and tourists.

1. Motivated tour guides, who’ll make their best effort

Since the tour guide is not paid while guiding free tours, you can expect them to work extra hard to make the tour worth it so tourists give them a bigger tip.

2. High quality professional

The background of your tour guide makes a big difference in the quality of a tour. So, most tour companies hire licensed guides who studied tourism and I guess you are doing the same. That’s the main difference between tour operators who offer free and the ones who offer paid tours. While free tours are often led by students, true professionals are already working for you. Tourists will know the difference.

3. Tour guides earn more money on free than on paid tours

As a tour company owner, you don’t pay them anything for free tours still, they get paid more than usual. Make sure to avoid 6 most common mistakes tour guides make when they are asking for tips.

“The guides are usually quite professional and they earn about the same or even more than a ‘typical’ guide (here in Georgia, at least).” – Maria Gornyak, Real Georgia Tours

“I’ve gotten $20 tips on a regular basis and I rarely lead tours. I’ve occasionally gotten $0 from folks from non-tipping culture and my highest has been $40-50 from a few individuals. Our guides are tipped $5-10/person in the average.” – Jill Collins, University of Colorado Anschutz Medical Campus

4. A great way to get the word around

Instead, investing a fortune in the promotion of tours and activities, consider word-of-mouth (WOM) marketing. It can do wonders for your tour company! Offering free tours guided by amazing tour guides brings satisfied customers. And satisfied travelers will get the word around! They share their travel experiences with their friends, family, and colleagues at work. Their voice is heard by their large online community of Facebook and Instagram followers and if the experience was good, more people will join your tours.

“Since Japan is a non-tipping culture, I don’t believe giving free tours would be worth our while. As a means of improving word-of-mouth reputation, it may well be worth trying.” – Rod Walters, Shikoku Tours

Free touring gives you an opportunity for cross-promotion. For example, while passing by few interesting monuments, a tour guide can mention there’s another tour that they can join. That way tour guides use the free tour to sell more paid tours. Free tour guides take the commission from souvenir shops and restaurants they take their clients to.

If your tour company offers paid tours, free tours could give travelers a taste of that experience. Free tours as a teaser? Yes. Just like finding a must-watch movie while watching trailers in the cinema and waiting for a movie to start.

5. Gather excellent TripAdvisor reviews

Like in any tour, a tour guide can ask tourists to leave a review on TripAdvisor. Since free tours are usually more crowded than the paid ones, more people will hear their request. The more satisfied (or completely the opposite—the more unsatisfied) they are, the more reviews you’ll get. What kind of reviews, depends on the quality of your tour guides.

If You’ll Offer Free Tours, Do It Right

Due to complaints received about walking tour guides asking customers for tips despite the tour being advertised as free, UK’s independent advertising regulator (ASA) initiated a project looking into the advertising practices of walking tour operators in the UK. As a consequence of the project’s findings, they published a guide to help free guided walking tour operators ensure their advertising is not misleading. There are four key principles advertisers have to take into account when using the term “free” in their ads:

• Only advertise a tour as ‘free’ if the tour is provided with no mandatory cost to the customer, at any point during the tour. Otherwise, travelers don’t expect to be asked to tip a guide and may feel misled.
• Emphasize that tour guides will be inviting customers to tip them during the tour if this is the case.
• Explain tipping (aka gratuity) is entirely voluntary. Claims such as “tips welcome” or “guides work on a tips-only basis” will be understood.
• Make clear that tips are not kept in full by the tour guide if this is the case.

What’s Not to Like About Free Tours?

As I mentioned earlier, free tours have drawbacks too. Some are more obvious than the other. For instance, if you offer sightseeing with hot air balloons, you can’t create a free tour teaser. Either balloon is in the air, either it’s not. Once you lift, you’ve seen everything. It’s not likely you’ll go one more time and pay for the same tour.

1. Tour guides not willing to offer their services free of charge

Most of us like security, so not having a salary and depending on tips doesn’t sound good to a lot of people, tour guides included.

“In Japan, there are very few people who are qualified to offer tours in foreign languages, whether by the true knowledge of the destination or linguistic ability, and those who are would need a very good reason to offer their services free of charge.” – Rod Walters, Shikoku Tours

2. Bad reputation of tour guides who guide tours for free

It’s more like a fact, rather than a standpoint that guides who guide free tours aren’t licensed tour guides. Most often, they haven’t passed their tour guide exam meaning they don’t own a tour guide certificate. Therefore, it’s not surprising to hear their colleagues (as well as some tourists) are suspicious of them.

“Free tours are a vehicle for non-licensed, not trained people who call themselves guides without really knowing much about the job. I’ve never met a qualified professional who agreed to work for a tip, except when volunteering.” – Cátia Luis, Lisbon Stories

As you can see, public perception of tour guides who guide groups for free is bad. They are even called “begging guides”. Though you hired licensed tour guides, it will be a challenge to prove they are different from the rest in a free touring business.

3. Free tours’ negative effects on tour guides

Licensed tour guides are concerned what will happen if they offer their services free of charge. Wages could scale down and lead to a tour guide’s devaluation.

“In terms of market, it lowers the amount of money people are willing to spend, destroying the walking tour industry. Which affects everyone.” – Cátia Luis, Lisbon Stories

4. Tax evasion problem

Free tours are not legally regulated. Do tour companies pay tax on earned income? It’s impossible to charge taxes on gratification and this gets an unfair advantage towards classic tours. It hurts the local economy of the country.

Finally, Are Free Tours Right for You?

Should you offer free tours and adjust your marketing strategy is something that is best left up to each of you individually. With everything I’ve said, I hope I’ve given you something to think about.

Share your thoughts on free tours in the comment section below.👇

ORIOLY
on January 4, 2018

by Lidija Šomodi